Economy, Remodeling Send Toys R Us to $29 Million Second-Quarter Loss; Toyseller Expects Solid Fourth Quarter20 Aug, 2001 By: Hive News
Paramus, N.J.-headquartered Toys R Us recorded a second-quarter loss of $29 million, matching Wall Street expectations that were revised last month after the nation's second biggest toy retailer warned of lowerprofits due to the sluggish economy and continued investments in storeremodeling, according to an Associated Press report.
Toys R Us, second in toy retailing only to Wal-Mart Stores Inc., said Monday that it lost 15 cents per share for the three months ended Aug. 4. That compares with a profit of $3 million, or a penny per share, in the year-ago period.
Sales for the period were $2.02 billion, up 1% from $1.99 billion a year ago. Excluding the impact of currency translation, sales gained 3%.
The retailer said that it is well-positioned to deliver a fourth-quarter profit in line with analysts' estimates of $1.52 per share.
Shares of Toys R Us were up more than 7%, or $1.60, at $24 per share in Monday morning trading on the New York Stock Exchange.
John Eyler, chairman and c.e.o., said in a statement that the chain ``continues to make very good progress on executing our strategic initiatives.''
The company's newly renovated stores continues to outperform its traditional format stores. And itsexclusive merchandising programs are expanding, and were the primary drivers of a gain in gross margins in the second quarter, the company said according to the AP.
Even in a difficult economy, Eyler said, its same-store sales at U.S. stores were unchanged from a year ago.
The company remains ``confident that the improvements being made will deliver substantial benefits to Toys R Us beginning with this year's holiday season,'' Eyler said.
The company is retrofitting 250 domestic stores during fiscal 2001 and expects that 70 stores will be under construction at any point through the end of the third quarter.
Toysrus.com saw sales almost quadrupled to $35 million for the second quarter, from $9 million in the year-ago period.
Kids R Us comparable store sales suffered a ``low double-digit'' decline, while Babies R Us comparable store sales rose 1% in the second quarter.
For the first six months, Toys R Us reported a net loss of $47 million, or 24 cents per share, compared with a net income of $18 million, or 8 cents per share, in the year-ago period.
The 2000 results excluded a quarter pre-tax gain of $315 resulting from the initial public offering of Toys R Us-Japan. Including the one-time gain, the company reported a net income of $218 million, or97 cents per share.
Sales for the six-month period were $4.01 billion, down from $4.31 billion in the year-ago period.
Toys R Us operates 1,578 stores, including 704 toy stores in the United States, 496 international toystores, 185 Kids R Us children's clothing stores, 151 Babies R Us stores and 42 Imaginarium stores.